The rating on Connecticut Health and Educational Facilities Authority's bonds, issued for Catholic Health East, reflects: * Excellent financial and geographic dispersion combined with a generally successful track record of business growth within the founding affiliates; * A strong financial profile highlighted by sound debt service coverage, cash flow and liquidity for the system as a whole, and moderate debt levels; * A well thought out governance and management structure that allows regional managers latitude to manage the regional business while keeping the central office focused on strategic systemwide issues; and * Implementation of systemwide infrastructure that helped CHE return to operating profitability through five months (unaudited) of fiscal 1999 after modest operating losses in 1998. Offsetting factors include reimbursement
